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Annual R E P O R T

JULY 2025 - JUNE 2026 JANUARY 20178 | WWW.

Chairperson of the Board of Directors Letter Dear Palmetto Dunes Property Owners, On behalf of your Board of Directors, I am pleased to present the 2026 Annual Report of the Palmetto Dunes Property Owners Association. This report reflects a year of steady progress, thoughtful stewardship, and continued commitment to the qualities that make Palmetto Dunes one of Hilton Head Island’s most distinctive residential resort communities. Palmetto Dunes is defined by its oceanfront setting, 11-mile lagoon system, live oaks, and, most importantly, the owners who invest in its future and share responsibility for preserving its natural beauty, protecting property values, and sustaining a welcoming, well-managed community. This year we focused on priorities supporting daily operations and long-term resilience: consistent services across property types, new Architectural Review Board (ARB) guidelines and related processes, common-area and infrastructure maintenance, lagoon and environmental protection, and strong owner communication. One major initiative was the Services Study, evaluating revising POA service delivery throughout the community and reinforcing our commitment to fairness, transparency, alignment with our governing documents, and prudent use of Association resources as Palmetto Dunes continues to evolve. Effective January 1, 2026, the Association adopted new ARB guidelines and a streamlined approval process. This new approach helped owners maintain and enhance their properties efficiently while upholding the design, quality, and community standards that protect Palmetto Dunes’ character and property values. Related contractor guidance has also helped those doing business in the community and has enticed some companies to re-consider doing business here. The Finance Committee strengthened the Association’s financial foundation by approving a revised investment strategy and selection of a new investment advisor. This new targeted investment approach now aligns each fund’s decisions with its purpose, timing, and risk profile and allows us to better position the Association for long-term resilience. Sustained progress depends on collaboration among committees, volunteers, Board members, and professional staff. Their work in architectural review, finance, grounds and safety, conservation and community building, administration and security helps sustain the quality of life in Palmetto Dunes. Our Earth Day events and the new Bike Ambassadors program are prime examples. A cross function

JULY 2025-JUNE 2026 ANNUAL REPORT

work group has taken responsibility for the design of pocket parks to enhance enjoyment of and use of our common areas, and new benches, little free libraires and dog station resources have been strategically added throughout the community. We continue to emphasize the importance of clear timely communication through owner’s time following Board meetings, monthly Chair and Staff Chats, weekly and ad hoc community updates, Perspective magazine, and informal dialogue. Looking ahead, we remain focused on responsible financial management, preservation of community assets, thoughtful planning, and practical solutions that serve the best interests of Palmetto Dunes while respecting its environment and history and preparing for future needs. Thank you to our staff, volunteers, committee members, and fellow Board members for their dedication and service. And most of all, thank you to our owners for your continued support, involvement, and care for Palmetto Dunes. Together, we continue to protect and enhance a community that is truly special.

MISSION, VISION & VALUES OUR MISSION To enhance the quality of life, strive to protect the natural environment, and improve the resources of our community for all who live, invest, work and play here. OUR VISION To be the best residential beach resort community in the southeast. OUR VALUES STATEMENT Palmetto Dunes is accountable to our community, neighbors, visitors, and natural environment. We strive to build sustainable relationships through

Sincerely, Barbara McFadden Chairperson, Board of Directors Palmetto Dunes Property Owners Association

mutual respect, integrity, and a collaborative spirit. OUR TAGLINE Where visitors become locals

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Palmetto Dunes

The Palmetto Dunes Property Owners Association (PDPOA) is a non-profit corporation dedicated to providing security, maintenance, and administrative support for property owners within the Palmetto Dunes community. This private community includes 2,174 properties—1,241 villas and 933 homes or lots—spread across Mariners, Inverness, and the Queens Folly corridor. The PDPOA owns or maintains the community’s roads, bridges, common areas, lagoon and lakes, open spaces, leisure paths, and beach access points. While the Association oversees these residential and common-use areas, Greenwood Communities & Resorts holds title to and operates the community’s commercial amenities, including golf courses, tennis facilities, restaurants, and other resort features. In addition to property and infrastructure management, the PDPOA is responsible for security services, issuing and controlling vehicle identification stickers and passes, and maintaining traffic control signs and signals throughout the community. These efforts help ensure Palmetto Dunes remains a safe, well-maintained, and welcoming environment for all residents and guests. Operation of the PDPOA is vested in a Board of Directors consisting of property owner members who serve without compensation and are elected by the membership of the Association.

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Community The PDPOA is responsible for 75.52 acres of common area in addition to the roads, lagoons, leisure paths, and beach access paths. •

Administration & Security Building

•

Lagoon & Lakes: 11- mile navigable lagoon, 2 lakes

• •

•

Community Boat Ramp

•

29 Miles of Roads

•

5 Miles of Leisure Pathways

1 Kayak/Canoe Launch

•

12 Bridges

Fishing/observation deck

•

19 Beach Access Points (stairs or ramps)

Single-Family Homes: 933

Villas: 1,241

• • •

Inverness/South Gate: 187 Mariners/North Gate: 746 Queens Folly: 0

•

2,174 “doors” – houses, villas, multi-story condos

•

Total Resort Acerage: 1,826 acres (including Leamington and Shelter Cove)

Inverness/South Gate: 551 Mariners/North Gate: 203 Queens Folly: 487

Multi-family There are 19 multi-family complexes in Palmetto Dunes. Each complex is managed by a regime company who is responsible for maintenance, mailboxes, trash, pools, and similar infrastructure. Beach Villas Captain’s Cove Captain’s Walk CentreCourt Fazio I & II (1 – 39) Fazio Villas III (40 – 58) Hickory Cove Inverness Village Ocean Cove Queen’s Grant I (555 – 608)

Queen’s Grant II (501 – 554) & (609 – 635) Queen’s Grant III (690 – 743) Queen’s Grant IV (744 – 797) Queen’s Grant V (636 – 689) St. Andrews Common The Moorings Turnberry Village Villamare Water Oak

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Board of Directors The association is governed by a ten member Board of Directors, including one member appointed by Greenwood Development Corp. Directors are elected prior to the annual meeting each year and serve a three-year term. If a vacancy occurs on the Board, for any reason other than the expiration of a three-year term, the remaining directors shall elect a qualified association member to fill the vacancy until the next annual meeting of the membership. The remaining unexpired term in excess of one year shall be filled by a vote of the membership at the next Annual Meeting.

Barbara McFadden Chair

Lee Whitehurst Vice Chair

Bob Tablot Treasurer

Alice Bettencourt Secretary

Karen Booth

Kelly Brown

Kurt Faires

Cate Jarrett

Lutz Schremmer

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Brad Marra Greenwood Appointed Director

Palmetto Dunes POA Organizational Chart

Administration

Security

General Manager – Bill Dix

Captain, Enforcement Services Manager –

Communications Director – Elizabeth Simpson

Darryl Johnson

Administrative Coordinator – Kathleen Ryan

Captain, Admin Services Manager – Rick Miller

Reception & Operations Assistant – Lena Murray

Lieutenant, Patrol Services – Brooker Devore

ARB Manager – Scott Krivda

Pass Office – Pam Chaney

Community Standards Manager – Cary Kelley

Pass Office – Jennifer Fields

Controller – Paige Dickerson

Pass Office – Shakeya Hamilton

Accounting Administrator – Kristen Capozzi

Pass Office – Deborah Seymour Pass Office – Lashana Young

Maintenance Asset and Enhancement Manager – Scott Kleist Maintenance Supervisor – Jimmy Martinez Maintenance Technician – Victor Diaz Maintenance Technician – Trevor Phelps Maintenance Technician – James Chisolm

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General Manager's Report Achievements & Successes July 2025 – June 2026 The past year has been one of progress for the Palmetto Dunes Property Owners Association. Guided by the Board of Directors' Strategic Plan, Management has focused on strengthening organizational leadership (realignment and refinement), enhancing community safety (speed enforcement and officer engagement), improving operational and financial efficiency (policies and processes), protecting our natural resources (water quality reporting), and building community with our property owners (Adopt-AHighway and Earth Day). While many of the accomplishments achieved over the past twelve months are not always visible, they represent important foundational improvements that will continue to benefit the community for years to come. One of the most significant accomplishments this year has been the organizational improvements and administrative modernization. Several key leadership positions were restructured to better align with the Association's long-term objectives, while staff responsibilities were refined to improve accountability, communication, and service delivery. Considerable progress was made in modernizing the Architectural Review Board process. Updated application tiers, revised procedures, improved communication with applicants, and expanded administrative review capabilities have simplified the submission process while maintaining the high architectural standards that preserve property values throughout Palmetto Dunes. Community safety continued to be one of the Association's highest operational priorities. During the year, the Queens Folly Corridor Safety Initiative has advanced significantly with engineering studies to evaluate long-term safety improvements and providing equal vehicle access control. Targeted speed enforcement and strategic patrol deployments reinforced safe driving habits and enhanced protection for pedestrians and cyclists. Beyond traditional enforcement, the Patrol Division embraced a cultural shift toward becoming a community service-driven team focused on engagement, education, assistance, and voluntary compliance. Officers are increasingly viewed as approachable ambassadors for the community, providing information, assisting residents and guests, and building positive relationships while maintaining a strong security presence. Expanded bicycle patrols increased officer visibility throughout neighborhoods. This balanced approach to community policing has strengthened trust, improved service, and helped create a safer, more welcoming environment throughout Palmetto Dunes. Throughout the year, management and the Board also reviewed or instituted necessary administrative policies, procedures, and internal processes. New and updated policies established clear standards for records management, assessment collections, short-term rental registration, short-term rental pass administration, employee benefits, and other operational procedures. The adoption of these policies represents good governance and provides a strong operational framework that will support the Association well into the future. New technology has been added and includes a “living” reserve study platform, an AI chatbot for ARB questions and improved workflow management tools have also enhanced the overall experience while reducing unnecessary delays. Management also devoted significant attention to protecting and preserving the Association's infrastructure and natural resources. Expanded lagoon water quality monitoring, debris removal initiatives, 8

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storm preparedness planning, drainage evaluations, and bridge preservation efforts have strengthened the Association's long-term asset management program. Engineering studies were initiated or advanced for several important capital projects. We initiated a comprehensive tree canopy assessment of the Queens Folly corridor by a certified arborist to evaluate the health, diversity, and long-term sustainability of one of the Association's most valuable natural assets. The study will serve as the foundation for a long-term tree management and replacement plan designed to preserve and strengthen the community's canopy for future generations. At the same time, the Association began the first phase of creating a dedicated bird rookery on Picnic Island and wildlife habitat through selective vegetation management. Planning for future community enhancements also continued throughout the year. Conceptual designs were completed for several proposed pocket parks intended to improve owner enjoyment while complementing the natural character of Palmetto Dunes. Significant progress was also achieved in improving owner communications and organizational transparency. Expanded community updates, educational articles, public workshops, owner forums, and digital resources have created additional opportunities for owners to stay informed about Association initiatives and provide valuable feedback. Management has continued to strengthen working relationships with the Town of Hilton Head Island, neighboring property owner associations, contractors, consultants, and community stakeholders to ensure that Palmetto Dunes remains active with communication across the island. The progress made this year has established a stronger operational foundation upon which future improvements can continue to be built. On behalf of the Management Team, I would like to express my sincere appreciation to the Board of Directors for their leadership and support, to our dedicated employees for their professionalism and commitment to excellence, to our committee volunteers for their valuable contributions, and to our property owners for their continued engagement and trust. As we look toward the coming year, I and the entire Management team remain committed to delivering exceptional service, maintaining responsibility for the Association resources, and continuing to implement initiatives that reinforce Palmetto Dunes' reputation as one of the premier residential resort communities in the Southeast.

Respectfully submitted, Bill Dix, CMCA, AMS, PCAM General Manager Palmetto Dunes POA

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Committees Our PDPOA committees have been very active in their respective areas, as well as collaborating with each other, to support the Board, Management, and the community. Executive Committee Objectives: • During emergencies when a quorum, by in-person and/or electronic means, of the full Board cannot be obtained in a timely manner convene only as necessary; • Within 48 hours of an emergency meeting, convene a Board meeting or distribute detailed communication to discuss the reasons for, and results of, the Executive Committee meeting, and • Receive and conduct a timely review and investigation of ethical or conflict of interest charges levied against a Board Director or Member of any committee and present its findings to the full Board in Executive Session. • Members: Board Officers Appeals Committee Objectives: • Ensure fairness and consistency in the application of all PDPOA policies, procedures, and regulations • Provide timely decisions •

Members: Kurt Faires (Chair); Kelly Brown; Derek Dalton; Jack Jancin; Mary Ellen Prentis

Architectural Review Board Objectives: • Carry out the Board’s authority for architectural, siting, landscaping, vegetation and building controls. • Assure that residential construction, remodeling, and landscaping are designed and built to high aesthetic standards consistent with the neighborhood character, and natural environment of Palmetto Dunes and to preserve the topographical and vegetative characteristics of each property consistent with the objectives of the covenants and the established architectural standards. • Efficiently and effectively conduct reviews and render decisions that are not arbitrary or capricious in accordance with the covenants and standards. • Members: Karen Booth (Chair); Cate Jarrett; Mary Ellen Prentis; Bruce Shafer; Ed Finison; Brian Julius 10

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Building Community Committee Objectives: •

Collaborate on Seasonal Event Planning

•

Support Event Execution

•

Plan Monthly Social Gatherings

•

Welcome New Owners

•

Promote Participation

•

In conjunction with Conservation and Grounds and Safety Committees, lead the investigation of and recommendations for small pocket park opportunities

•

Members: Cate Jarrett (Chair); Mary Amonitti; Kurt Faires; Jonathan Olsen; Becky Regenold; Marybeth Wiener

Conservation & Preservation Objectives: • Preserve and Enhance Natural Habitats • Encourage Responsible Wildlife Practices • Promote Sustainable Landscaping • Encourage Waste Reduction and Recycling • Promote Low-Noise and Low-Emission Technologies • Engage the Community in Conservation Awareness • Members: Kelly Brown (Chair); Jerry Bowling; Paula Eardley; Robert Lotstein; Ellen Albertini; Lutz Schremmer Finance Committee Objectives: • Provide oversight for the development and review of the annual operating and capital budgets; • Perform long-term financial planning and ensure that financial objectives align with the organization’s strategic plan as set forth by the board of directors, recommending corrective actions to the board as appropriate; • Review, on a regular basis, the organization’s internal financial statements and recommend actions to be undertaken by the board as needed; • Review the organization’s personnel benefits package and recommend actions to be undertaken by the board as needed; • Serve as the audit committee to provide independent and objective oversight of the organization’s financial policies and procedures; and • When the need arises, review, investigate and/ or provide guidance regarding financial implications of a pertinent issue or transaction as directed by the board, including any acquisition or divestiture of property. • Members: Bob Talbot (Chair); Alice Bettencourt; Dan Ekberg; Kurt Faires; Tammy Moore; Dan Regenold; Jim Schumacher; Jean Smith; Dan Torbeck

Grounds & Safety Committee Objectives: • Research and propose a plan to introduce more community policing into current Palmetto Dunes Security processes • Analyze and propose solutions to unauthorized parking and beach visitors • Members: Lee Whitehurst (Chair); Patricia Courtney; Mario Ramirez; Dean Shifflett; Philip Ovuka; Nancy Schroeder; Michael Carr Nominating Committee Objectives: • Responsible for interviewing new Board of Director candidates • Follows nominating guidelines as set forth in the by-laws • Proposes new candidates to the PDPOA membership and Board of Directors for approval • Members: Lee Whitehurst (Chair); Kathy Lane; Jean Smith; Bob Talbot; James Thomas Committee rosters evolve as members join, rotate off, or take on new roles. The list above reflects the committees and members active at the time this report was prepared.

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Strategic Plan The Palmetto Dunes Property Owners Association

creating opportunities for residents to connect

Strategic Plan serves as the roadmap for guiding

through programs, events, and volunteer initiatives.

the Association's decisions, priorities, and longterm success. It is designed to ensure that every

Natural Environment – Preserve and protect the

initiative supports the Association's mission and

natural beauty and environmental resources that

values while addressing the evolving needs of the

define Palmetto Dunes through responsible stew-

community. The Strategic Plan focuses on measur-

ardship, conservation efforts, and sustainable

able goals, accountability, and continuous improve-

practices.

ment to help maintain Palmetto Dunes as a premier residential and resort community.

Improve Resources – Invest in and enhance the community's infrastructure, amenities, technology,

The Strategic Plan is built on several guiding prin-

and services to meet current needs while planning

ciples. Each goal and priority area is aligned with

for future improvements.

the Association's mission and values and is clearly defined with measurable outcomes. The plan em-

Financial Health – Maintain the Association's

braces a philosophy of continuous improvement by

long-term financial stability through responsible

regularly reviewing and updating policies to adapt

budgeting, sound fiscal management, and strategic

to changing community needs and enhance op-

investment in community assets.

erations. Responsibility for the Association's core operations remains with the General Manager and

Operational Excellence – Continuously improve

the PDPOA Board of Directors, while all committees

organizational effectiveness by strengthening gov-

are aligned with specific strategic goals to ensure

ernance, enhancing operational processes, embrac-

their work directly supports the Association's

ing innovation, and delivering exceptional service to

overall objectives. Throughout every initiative, the

property owners and stakeholders.

Association remains committed to reducing risk and protecting the community's assets.

Together, these objectives provide a comprehensive framework for decision-making, committee

Five strategic objectives provide the framework for

work, and operational planning. By aligning every

the Association's work:

initiative with these strategic priorities, the Association is well positioned to preserve the quality of life,

Build Community – Foster a welcoming, engaged,

protect community assets, and ensure the long-

and connected community by enhancing owner

term success of Palmetto Dunes for years to come.

participation, encouraging communication, and 12

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BUILD COMMUNITY Goal: 75% electronic opt-in for receiving official notices (meetings, proxy, etc.)

Strategies Promote e-notice opportunities, coordinated communication plan to reach as many as possible over different mediums Progress to Date • Front desk and ARB asking owners to opt-in when speaking with them • Electronic opt-in card on front desk • Quarterly Tidings reminders to opt-in • Ran promotion March-April for opt-ins with one winner being drawn from all opt-ins to receive a 2-night Hilton Beachfront Resort stay • Current electronic opt-in: 23%

Goal: 10% annual growth in event attendance each year (3 years)

Strategies Develop a social media/communications plan to connect with owners with a focus on positive messaging Progress to Date • Hosted 32 owner events with 1028 owners attending; Up 5% • Expanded Earth Day event from 13 to 81 participants • Sold out the Annual Oyster Roast • Conducted two community event surveys to get feedback from owners on what events they would like to see

Goal: Expanded Owner Benefits

Strategies Investigate innovative ways to provide owner benefits (e.g.: Owners’ card benefits, enhanced golf, hotel F&B discounts) Progress to Date • Added an additional 11 businesses to the owner discounts offered, bringing the total number of participating businesses to 34 • Expanded Dunes Buggy service by offering service beginning February 1 • Issued 514 Owner ID Cards

Goal: Bi-Annual Community Satisfaction Survey Strategies Develop target areas of survey with focus on satisfaction

Progress to Date • Received Scope of Work from Georgia Southern. • Will be working with the Board to refine questions and measurables. • Target send out first quarter of 2027. JULY 2025-JUNE 2026 ANNUAL REPORT

NATURAL ENVIRONMENT Goal: Lagoon Health Strategies Quarterly water testing results in acceptable ranges Progress to Date Water quality monitoring shows that salinity and turbidity remain within established performance targets, supporting continued lagoon system function and water clarity. •

Bacteria indicators are in line with prior seasonal fluctuations and remain a focus of continued monitoring.

•

The addition of freshwater pond sampling strengthens PDPOA’s ability to manage lagoon health.

Goal: Tree Canopy Health Strategies Engage an Arborist to define baseline metrics and build a 3-year plan on canopy health procedures for Queens Folly corridor trees. Progress to Date •

Arborist assessment completed. Deliverables received.

•

Of the 401 trees assessed, 97% are in excellent or good condition with less than 1% in poor condition. 98% are moderate to low risk rating.

•

Based on the information received, developing a long-term Tree Management Plan

Goal: Create Community Awareness of the natural environment and wildlife Strategies Host quarterly educational wildlife events/discussions for owners and visitors. Turtle Patrol links for community and effective interfacing with Patrol. Progress to Date

•

Regular wildlife educational speaker forums, including Earth Day.

•

Initial preparation for a rookery bird habitat on Picnic Island

•

Increased Turtle Patrol presence including at weekly Turtle Trots

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IMPROVE RESOURCES Goal: Traffic & Safety Awareness Strategies Address traffic flow and safety challenges in high-traffic areas, with a primary focus on the Queens Folly Corridor. Conceptual redevelopment plans to be created. Progress To Date • • •

Developed conceptual redevelopment plans for the Queens Folly Corridor focusing on safety and flow. Under review with Board. Redevelopment includes vehicular access control with corridor properties. Engineering discussions in progress. Established community engagement culture with patrol team visible and on foot, in high traffic areas for awareness.

Goal: Maintain and improve resources and amenities Strategies Beach access standards assessment; additional Mobi mats at beach entries; PD Beach parking solutions; study to assess potential pathway expansion in areas of community Progress to Date • • •

Inspected and repaired approximately 5 miles of leisure paths and the footbridge from St George to Ocean Lane. Installed and enhanced community amenities including 2 community library boxes, 8 dog waste stations, 1 EV Charging Station and 2 additional Mobi Mats. Advanced planning and design efforts for future community enhancements include the Pocket Parks Program

Goal: Access to PDPOA information for Owners Strategies Develop AI interfacing for website. Website upgrades, including fillable documents. Regular posting of PDPOA documents. Add Owner portal event calendar. Progress To Date • • • •

Developed and created an AI agent named “Emily” on the ARB page to assist Owners with their ARB questions. Created and uploaded fillable documents, including ARB applications, request & order forms, and others. PDPOA document library expanded to include a new section called Board Initiatives. A community event and meeting calendar was added to the Owner’s portal. JULY 2025-JUNE 2026 ANNUAL REPORT

FINANCIAL HEALTH Goal: Budget Accuracy +/- 5% of Annual Budget Variances

Strategies Maintain predictable revenue streams and identify additional stream increase aligned with long term forecasts. Progress To Date • 6 months 2026 - Total Operating Income $62,397 over budget (1.23% positive variance), Total Operating Expense $216,745 under budget (6.72% positive variance) • FY 2025 Total Operating Income $189,619 under budget (0.19% negative variance), FY 2025 Total Operating Expense $619,614 under budget (8.71% positive variance) • FY 2025 Dividend/Interest Income $210,247 over budget (22.98% positive variance), FY 2025 CEF Net Income $238,066 over budget (45.35% positive variance) • Dividend/Interest Income $93,996 over budget (20.89% positive variance), CEF Net Income $120,697 over budget (40.88% positive variance)

Goal: Accurate Capital Planning

Strategies Update reserve study annually in house and every three years with outside professional. Progress To Date • Contracted with Reserve Study firm and identified all current capital components and values. • 2027 Reserve study funding number updated and entered in platform. • Planning and funding models to be used in creating 2027 Capital budget.

Goal: Achieve Reserve Funding Ratio Goals

Strategies Target ratios increase from 58% in 2027 to 70% in 2035. Progress To Date • 12.31.2025 R&R Reserve Balance $14,209,182 (65.91% target inclusive of Contingency Reserve Balance) • 06.30.2026 R&R Reserve Balance $16,003,493 (78.94% target inclusive of Contingency Reserve Balance)

Goal: Monitor investment returns while shifting to follow PDPOA’s IPS

Strategies: Onboard Investment Manager and review of IPS. Regularly review health of investment portfolio. Progress To Date • BOD adopted revised IPS February 2026 • Completed RFP process and transitioned to new Portfolio Manager as of March 1, 2026. • Investment-focused Finance Committee members to meet quarterly with portfolio manager for performance and IPS compliance review 16

JULY 2025-JUNE 2026 ANNUAL REPORT

OPERATIONAL EXCELLENCE Goal: Modernize and simplify a fair ARB process Strategies Refresh the ARB process to meet needs of all stakeholders and reduce risk of subjectivity. Simplify applications and permits. Survey builders annually for feedback. Progress To Date • • •

Developed and created a Tiered ARB application process. Focus on reduced fees and less administrative review for lower tier projects. Redeveloped review process for faster tracking through the ARB. Redesigned applications for simplicity and technology (fillable).

Goal: Compliance aligned with community values and best practices Strategies

Review and refresh compliance policy including fines, appeals, PPGs and resort rules and regulations. Progress To Date • • •

Cultural shift towards education before enforcement has resulted in a reduction in citations while not lowering community standards. Revision of Policies, Procedures & Guidelines has been done for Short Term Rentals and is being worked on for others. Almost completely eliminated the need for appeals of fines.

Goal: Operational systems integration and improvements Strategies

Reduce stand alone platforms to reduce costs and improve efficiencies. Such as Microsoft licensing inhouse, cloud-based, not server based, and advanced camera and access systems with expanded online capabilities Progress To Date • • • •

Removal of third-party platform management to in-house resulting in annual savings of $96,000 Removal of third-party software underutilized where data can be absorbed by other software resulting in over $10,000 of annual savings Moving to cloud-based Microsoft platform and in-house licensing, removing the need for local server replacement of $30,000. Fiber upgrade to administration building and replacement of existing cameras with high tech camera system capable of Automated License Plate Reader is in process.

JULY 2025-JUNE 2026 ANNUAL REPORT

OPERATIONAL EXCELLENCE Goal: Every Committee has a clear link to the strategic plan goals Strategies Align Governance and Volunteer Systems in compliance with SC Law and facilitate consistent decision making, including monthly reporting and open meetings. Progress To Date • • •

All committees with delegated Board authority have a minimum of two Board members. Committee Chairs provide monthly reports to the Board. All committee meetings (with the exception of ARB, Private Citation, and Executive Committee, andexecutive sessions), are open to all members of the association. Schedules are published.

Goal: Every Team member has a clear link to the strategic plan Strategies

Frequent and regular check-ins on department leaders and progress to Strategic Plan goals. Annual performance incentives tied to Strategic Plan goals. Progress To Date • •

Leadership meetings are conducted every other week and focus on individual goals aligned with the Strategic Plan. Focus on plan objectives is a primary spotlight during consideration for incentives.

Goal: Key Metrics from Business Partners in the Community Strategies GM develops mutually beneficial relationships with partners. GM hosts business partner roundtables twice per year. Progress To Date • • •

GM was appointed to the Land Management Ordinance (LMO)Task Force for the Town of Hilton Head for direct inclusion in ordinance evaluation. GM has developed relations with the commercial partners (Omni, Hilton, Disney) and has secured their involvement in association events as a contributor. GM and Board Chair will be conducting twice-a-year Regime roundtable forums with Board Presidents. First one is in September 2026.

JULY 2025-JUNE 2026 ANNUAL REPORT

Capital Projects From July 2025 – June 2026, Property Operations completed eight major capital projects and 942 work requests while continuing to invest in the preservation and enhancement of community infrastructure, amenities, and environmental assets. These efforts improved safety, accessibility, infrastructure reliability, and overall quality of life for residents and guests while supporting the long-term stewardship of Palmetto Dunes.

Completed (July 2025-June 2026) Full Sweep Road Resurfacing

Port Tack Sinkhole Repair

Completed roadway resurfacing along Full Sweep,

Repaired roadway infrastructure impacted by

improving driving conditions, safety, and overall

subsurface failure, restoring safety and preventing

community appearance while extending the useful

further deterioration of the surrounding area.

life of the roadway and protecting the Association's infrastructure investment.

Heath Sinkhole Repair Addressed developing roadway

St. George Pedestrian Bridge

instability before additional damage

Renovation

could occur, protecting both infra-

Improved pedestrian safety

structure and public safety.

and long-term reliability by renovating aging bridge infra-

EV Charging Station Installation

structure serving a frequently

Expanded community amenities by

used community pathway.

providing electric vehicle charging infrastructure to support evolving

Villamare Crosswalk

transportation needs.

Improvements Enhanced pedestrian visibil-

Leisure Path Repair Program

ity and safety within a high-

Repaired and improved approximate-

traffic area, helping to im-

ly three miles of leisure paths, enhan-

prove connectivity between community amenities

cing safety, accessibility, and overall user experi-

and the beach.

ence throughout the community.

Lagoon Sediment Removal Began removal of accumulated sediment from the lagoon system, improving water flow, reducing maintenance concerns, and supporting long-term lagoon health.

JULY 2025-JUNE 2026 ANNUAL REPORT

Capital Projects Upcoming Mooring Buoy Phase 3 – Port Tack to the End of Mooring Buoy MB3 remains one of the Association’s most significant infrastructure initiatives. Design refinements, permitting coordination, and contractor pricing efforts are nearing completion. During the project there will be significant roadway disruptions and traffic control in place. Once constructed, the project will provide substantial improvements to stormwater capacity, drainage performance, and long-term infrastructure upgrades in this section of Mooring Buoy. Tentative construction window: September 2026 – March 2027. Rum Row Drainage Improvements Final permitting and easement activities are underway for the Rum Row Drainage Improvements Project. With only minor comments remaining from the Town review process and Coastal Zone Consistency approval already secured, the project is nearing construction readiness and will provide enhanced stormwater conveyance and flood mitigation for an area with roadway flooding. Tentative construction window: October 2026 – February 2027 Haul Away Drainage Improvements The Haul Away project continues advancing through design and permitting. The project includes adding additional stormwater drainage which will improve stormwater management along with roadway replacement for long-term infrastructure reliability. Tentative construction window: January 2027 – May 2027. Mooring Buoy Phase 2.1 – Sea Lane to Port Tack The project includes required upgraded stormwater infrastructure improvements to be able to accommodate future drainage improvements to the “T” streets, and a redesigned outfall system intended to improve overall drainage performance and the stormwater network. Planning, permitting, and engineering efforts continue advancing MB2.1 toward construction. Tentative construction window: January 2027 – April 2027. Port Tack Water Control Project The Port Tack Water Control Project continues through regulatory review with the Town of Hilton Head. The project is intended to provide improved Port Tack pond water-level management through controlled water movement and will provide PDPOA staff with the ability to proactively manage pond water levels before heavy rainfall events, reducing overflow and localized flooding risks. Tentative construction window: October 2026 – November 2026.

JULY 2025-JUNE 2026 ANNUAL REPORT

Community Enhancements Completed (July 2025-June 2026) Mobi Mat Installation (Dinghy & East Wind) Improved beach accessibility by providing enhanced access for residents and guests with mobility limitations. Enhanced Front Entrance Lighting Improved nighttime visibility, safety, and community appearance at the Hwy. 278/Queens Folly community entrance. Beach Access Boardwalk Improvements Enhanced safety and usability of beach access infrastructure while supporting continued public access to community amenities. Community Library Box Installations Expanded neighborhood amenities and encouraged community engagement through shared reading resources. Dog Waste Station Installation Program Improved cleanliness and convenience throughout common areas while supporting responsible pet ownership. Leisure Path Bench Additions Installed two new benches along the leisure path system, enhancing comfort, accessibility, and the overall recreational experience for residents and visitors using community pathways. Pass Office Lane Over-Height Clearance Bar Reduced the risk of vehicle strikes and property damage through improved clearance management and infrastructure protection.

JULY 2025-JUNE 2026 ANNUAL REPORT

ARB & Compliance

JULY 2025-JUNE 2026 ANNUAL REPORT

Security

Staffing

* A 911 hangup call is a welfare check requested by the Sheriff's Office after a 911 caller disconnects. Most are accidental misdials, but officers verify the situation and report the results back.

The Palmetto Dunes Patrol team is committed to assisting residents and guests with community-related matters and helping to keep our neighborhood safe. However, if you are ever faced with an emergency or life-threatening situation, call 911 immediately. Emergency dispatchers can quickly coordinate police, fire, and EMS response, ensuring the appropriate resources are sent without delay. While our Patrol team will always do its best to assist whenever possible, contacting 911 first during an emergency remains the fastest and most effective way to receive immediate help. JULY 2025-JUNE 2026 ANNUAL REPORT

Pass Activity During the reporting period, PDPOA Security processed 159,734 access passes for owners, guests, renters, contractors, vendors, and service providers entering Palmetto Dunes, and on behalf of Leamington, and Shelter Cove units. The tables below show that 71% of total passes processed by the Pass Office are associated with Palmetto Dunes’ properties. As well as the mix between commercial, rental, visitor and other. The 159,734 total passes are down 1% (1,732) from the same prior reporting period (July 2024 – June 2025).

What This Means for Owners • Gate access activity remains substantial, with rental, commercial, and visitor passes each representing a major share (96%) of all total activity. Short-term rental pass issuance accounts for approximately one-third of the Pass Office’s administrative workload. • Palmetto Dunes accounted for the majority of pass activity, while Leamington and Shelter Cove also generated significant access-control workload. • Access control and pass-related revenue help fund community security, support rental guest management, and offset operating costs that would otherwise need to be covered fully through owner assessments.

JULY 2025-JUNE 2026 ANNUAL REPORT

Short-Term Rentals The 2026 usage data shows that Short Term Rental (STR) activity represents the majority of all PDPOA doors: 1,252 of 2,174 doors, or 58%. Multi-family units have the highest STR concentration at 822 of 1,241 doors (66%), while single-family homes show 430 of 933 doors (46%) used as STRs. Across all doors, the total use breakout is 58% STR, 15% full-time owner, and 27% second home. From 2019 to 2026, STR rentals increased from 1,090 to 1,252 doors (+162), moving from 50.1% to 57.6% of all doors. Full-time owner use declined from 400 to 326 doors (-74), moving from 18.4% to 15.0%. 2026 second-home use totals 596 doors, or 27.4% of all doors.

JULY 2025-JUNE 2026 ANNUAL REPORT

Communications

JULY 2025-JUNE 2026 ANNUAL REPORT

Events

JULY 2025-JUNE 2026 ANNUAL REPORT

Financial •

PDPOA received an unqualified opinion on its 2025 independent audit completed by Symphona, LLC.

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Selected South State Wealth as the Association’s investment portfolio manager, transitioned investments effective March 1, 2026, and implemented the revised investment policy statement provisions and portfolio rebalancing into five separate individual funds as of April 1, 2026.

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For 2025, the Association ended the year with a positive net income of approximately $5.67 million, $2.36 million of which were from operations and $3.31 million were dividends and interest received and realized and unrealized gains on investments for the four designated reserve funds.

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The operating cash flow increased from $3.8 million to $5.3 million. In 2025, the Association transferred approximately $2.02 million net to reserves to fund future capital projects and invested $1.4 million in infrastructure and equipment.

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The reserve fund balances increased from approximately $23.6 million on December 31, 2024, to $29.0 million on December 31, 2025.

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Total Community Enhancement Funds (CEF) collected in 2025: $854,603

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In 2025, 128 properties were sold with an average price of $1.330 million

JULY 2025-JUNE 2026 ANNUAL REPORT

Commercial Partners Palmetto Dunes Resort (Greenwood) • 2 golf courses plus Top Tracer driving range (GW owns a 3rd course in Leamington) • Tennis and Pickleball center • 3 Restaurants—Alexander’s, Big Jim’s, Dunes House (seasonal) • General Store • Centre Court (event space) • Outfitters (bike, kayak rentals) Omni • 323 guest rooms • 5 Restaurants - HH Prime, XO Sports & Spirits, Palmetto Market, Breeze & Buoy Bar Hilton Beachfront Resort • 513 guest rooms • 5 Restaurants - Blue, Liquid, Ocean Blu, The Cafe, & Coffee Shop

Disney Vacation Club Beach House • 123 Rooms offering 3 different views (pool, marsh, resort) • 2 Quick Service Restaurants— Tide Me Over (Resort Side) & Signals (Beach House) • BH Bar - Surfman's Sandbar located at the Beach House (seasonal) • Poolside Bar at Big Dipper Pool (seasonal)

Commercial Partner Highlights Palmetto Dunes Resort (Greenwood) Hosted multiple PDPOA Member Events • 2 of the 3 most attended PDPOA events • Oyster Roast and New Year’s Happy Hour Newly Added Off-Peak Property Owner Golf Discounts • 1,000 Rounds played with new Discount YTD

JULY 2025-JUNE 2026 ANNUAL REPORT

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Up 700 rounds from previous year 4,500 Total Property Rounds played YTD

Dredge of Marina/ Spoil Site Project Starting this Fall • $5,000,000 Project

Disney's Hilton Head Island Resort • Celebrated Disney's Hilton Head Island Resort's 30th Anniversary on March 1, 2026, with Mickey and Minnie Mouse, Walt Disney World executives, ambassadors, and Legacy Cast Members from Opening Day. The celebration also included volunteer projects benefiting five local organizations and more than 700 military family members at Parris Island.

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Hilton Beachfront Resort and Spa Hilton Head Island • RBC Heritage - Proud sponsor of Heritage Tournament hosted by Boeing and RBC heritage foundation. • Proud partners of Clean the World program where we participated in the recycling soap and bulk soap containers.

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Omni Hilton Head Oceanfront Resort • Recognized in the Travel + Leisure Co. 2026 World's Best Awards, earning top honors across some of the publication's most prestigious hotel and resort categories. • Say Goodnight to Hunger: Omni Hilton Head donated 27,892 meals in Beaufort County through Feeding America in 2025, with a lifetime total of 314,086 meals.

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Continued resort enhancements with eight additional buildings completed as part of the Exterior Paint and Door Replacement Project; four more are scheduled next fiscal year. Asphalt repairs, delayed by weather, are now scheduled for completion by year-end Expanded leadership development with two Chamber Leadership alumni and one 2027 program participant.

Installed new parking gates to enhance guest safety and security. Added two aesthetically designed outdoor meeting and event spaces focused on holding beachfront events. ( weddings, proposals, corporate dinners). Proud part of the sea turtle conservation efforts and hosts of the weekly Turtle Talks.

Hilton Head Seafood Festival: Official Host Hotel Sponsor with a $40,000 donation to the David M. Carmines Memorial Foundation. RBC Heritage: Proud sponsor of the RBC Heritage Presented by Boeing and the Heritage Classic Foundation. Fill it Forward Program: Partnered with CBV to support reusable water bottle initiatives that give back to clean water projects.

JULY 2025-JUNE 2026 ANNUAL REPORT

PRSRT STD U.S. POSTAGE PAID HILTON HEAD, SC PERMIT NO. 759